KBRA comments on RMF Proprietary Issuance Trust 2019-1 (RPIT 2019-1), a securitization of proprietary reverse mortgage loans originated by Reverse Mortgage Funding, LLC (RMF). In 2022, RMF filed for Chapter 11 bankruptcy protection. Subsequently, RPIT 2019-1’s mortgage servicing rights were acquired by Longbridge Financial, and day-to-day servicing continues to be provided by Celink.

The terms of the indenture stipulate that the Issuer provide a notice of its intent to either exercise an Optional Redemption or conduct an asset auction by December 24, 2024. Given RMF’s bankruptcy, no such notice was provided. In the comment, KBRA discusses a number of possible scenarios and their potential impact on the payment waterfall, depending on whether, and how, Controlling Noteholders direct the Indenture Trustee.

KBRA will continue to monitor the transaction pursuant to its Reverse Mortgage Securitisation Global Rating Methodology, including considering any future notices from the Indenture Trustee.

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KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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